Member Articles

Putting the American in American Pharoah?

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Image: American Pharoah at the start of the race at Belmont. Source: Diana Robinson Last year left a bad taste in the mouths of horseracing fans across the globe. California Chrome had come off two fantastic wins in the Kentucky Derby and Preakness Stakes in order to position itself for a chance to make history by becoming the first Triple Crown winner in 36 years! The last thoroughbred to take home such an honor was Affirmed in 1978. For those that may not follow the “sport of kings,” to win the coveted Triple Crown, a three-year-old horse must win the Kentucky Derby in Louisville on the first Saturday in May, the Preakness in Baltimore, Maryland, two weeks after that, and … Read more

The Global Pandemic of Cybercrime, Cyber Espionage and Cyber Warfare

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“The new generation of cyber-attacks on organizations, including large and small enterprises and governments worldwide, is characterized by an unprecedented escalation in the complexity and scale of advanced malware created by criminal organizations and nation-states. These modern attacks are built on dynamic, stealthy and targeted malware that penetrates defenses in multiple stages and through multiple entry points of an IT network. These highly targeted, “single-use” cyber-attacks easily circumvent legacy security solutions that rely on pattern-matching detection technologies. Additionally, because legacy solutions reference outdated signatures of past threats, they also generate a high number of false-positive alerts.” – Fireeye Annual Report, 2014 The statistics are striking. According to a 2011 survey of ~580 US IT experts by research center Ponemon Institute, … Read more

May US Auto Sales Cruise Past Expectations

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Key Takeaways The US auto market has recovered significantly since the depths of the Great Recession, posting its best monthly unit sales levels in May in a decade and possibly positioning itself to reach the highest level of annual unit sales since 2001. Consumer demand continues to shift from cars to light trucks and SUVs as pain at the pump eases. America’s best-selling truck, the Ford F-Series, is losing market share, but this may just be temporary as it ramps up production to meet “sky-high” demand. Chevy and Toyota are busy capitalizing on the weakness, however. Tesla may have the brightest future among any auto maker in theory, but how long will it take for its plans to be realized?  … Read more

eBay Is Over $60 Per Share, Breaking Out

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I wanted to update members on eBay (EBAY), but let’s cover some ground on the (V)aluentum (B)uying (I)ndex first. The Valuentum Buying Index, or VBI, rating system is not the easiest to understand. There are as many stock-selection methodologies out there as there are fund managers and financial advisors. We’re talking tens of thousands, if not more. What we focus on within the Valuentum Buying Index framework is what matters. You may hear a fund manager talk about ROE, for example. But what you may not know is that ROE is inferior to ROIC because the former considers an artificial and non-operating boost from the application of financial leverage. We talked about this in the four-part education workshop here. Firms … Read more

No Value Lost in PPL Spinoff

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Dividend Growth Newsletter portfolio holding PPL Corp’s (PPL) shares were adjusted lower earlier this week, as the firm officially completed the spinoff of its energy supply business June 1. The move completes PPL’s transition to a focus on regulated utilities in the US and UK. PPL’s spinoff, now trading under the name Talen Energy Corporation (TLN), also includes the addition of RJS Power of Riverstone Holdings. As previously announced, all of the common stock of Talen Energy will be distributed pro rata to PPL shareholders. PPL shareholders received ~.1249 shares of Talen Energy common stock for each share of PPL owned as of May 20. Fractional shares were not issued; instead they were aggregated and sold in the open market, … Read more

Medtronic On Track with Covidien Integration

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Image Source: U.S. Embassy Kyiv Ukraine Today, June 2, Dividend Growth Newsletter portfolio holding Medtronic (MDT) reported its first results including business from recently-acquired Covidien. The acquisition was successfully closed on January 26, early in the fourth quarter of the firm’s fiscal year 2015, and was worth nearly $50 billion. In its report, management presented results in a couple ways, one on a strictly-reported basis and the other on a constant-currency, comparable basis. The latter includes Covidien’s prior-year monthly results aligned to Medtronic’s fiscal quarters, which the company feels gives a more accurate picture of underlying performance and the success of the early stages of integration of Covidien. The strictly-reported basis, on the other hand, provides a better understanding of the … Read more

The US Economy Is Shrinking

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“The way you lose money in the stock market is to start off with an economic picture. I also spend fifteen minutes a year on where the stock market is going.” and “If you spend more than 13 minutes analyzing economic and market forecasts, you’ve wasted 10 minutes.” – Peter Lynch I’m not so much a Peter Lynch disciple as I am a logical thinker. According to the legendary fund manager, you have a total of three minutes to read this piece on broader economic activity, and then move on to more useful analysis.  There’s no time to waste! Peter Lynch was the manager of the Magellan Fund at Fidelity Investments through the late 1970s and during the 1980s, where … Read more

Dividend Increases for the Week Ending May 29

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Below we provide a list of firms that raised their dividends during the week ending May 29. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week Bank of Montreal (BMO): now C$0.82 per share quarterly dividend, was C$0.80. Canadian Imperial Bank (CM): now C$1.09 per share quarterly dividend, was C$1.06. Donaldson (DCI): now $0.17 per share quarterly dividend, was $0.165. El Paso Electric (EE): now $0.295 per share quarterly dividend, was $0.28. Extra Space Storage (EXR): now $0.59 per share quarterly dividend, was $0.47. Hewlett-Packard (HPQ): now $0.176 per share quarterly dividend, … Read more

Are Corporate Credit Ratings Really Useful?

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Image Source: Simon Cunningham  There is no way… hold on, let me start over. There is absolutely no way that a company whose primary product price can fall 50% or more in a couple months is a pristine AAA-rated credit. It makes little sense. Having evaluated the credits of hundreds of companies spanning all sectors and industries, you’re never going to convince me that such a business model is worthy of a coveted AAA credit rating. Never. This week, Standard & Poor’s (MHFI) reiterated Exxon Mobil’s (XOM) AAA rating, as if the conditions that shellacked the energy markets the past 6 months simply do not apply to Exxon. Instead, the rating agency opted to lower the firm’s liquidity rating from … Read more

Is The Time Ripe to Pick Up Kors?

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You just can’t buy cheap stocks, and hope and pray things will work out. You know this! Not you personally — you know, the universal you.  The fundamental framework of the Valuentum Buying Index protects you from falling knives. It requires stocks to be both underpriced and “going up” before we would consider them. Yes, we can talk castles, moats, dividends, and anything else you’d like. But the VBI is the essence of our teachings. It’s the culmination of all research and analysis. We’re not kidding. Name it. It’s in there. The best stocks will be ones that are underpriced on a whole variety of different metrics and are also experiencing buying action or accumulation, as revealed by an upward … Read more